How Much will it Cost to Open a Dairy Queen Franchise? (2022 Update)
Dairy Queen franchise cost is a kind of summertime ritual if you’re from the Midwest. One of the rare establishments operating just from May to September in my hometown was Dairy Queen.
Price for Starting a Dairy Queen Franchise Cost?
Since Dairy Queen can be franchised, you’re in for a delicious treat. Financial requirements for franchise operators include having $750,000 in net worth and $400,000 in liquid capital.
Between $1,151,155 and $1,936,655 is the projected investment range, while the franchise fee is $45,000.
Are you curious to know more about this venerable soft-serve franchise? Continue reading to see my analysis of the company’s annual income, benefits, and drawbacks, as well as whether franchising dairy queen franchise cost is the correct business for you.
History of the Dairy Queen Franchise Opportunity
J.F. McCullough and his son Alex invented the ice cream that would become known as Dairy Queen’s soft serve in 1938.
They could sell it in Kankakee, Illinois at Sherb Noble’s “All You Can Eat for 10 Cents” ice cream event. Over 1,600 people lined up to sample the ice cream, showing that the event was a success. The successful commercial venture that became Dairy Queen came next.
Dairy Queen has a history of swift, profitable growth. Dairy Queen had over 3,000 locations by the 1950s.
In order to direct and advance the needs of the brand’s advertising in other nations, International Dairy Queen, Inc.
Was established in 1962. By 1976, there were Dairy Queen stores in Barbados, Canada, Japan, Panama, Iceland, and six other countries.
When Dairy Queen originally opened for business, its initial menu comprised soft-serve cones and sundaes.
Later, the business expanded the menu to include shakes and malts. The Dilly Bar, flavored sundaes, ice cream sandwiches, and banana splits all debuted in 1955.
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Burgers, French fries, and hot dogs were added to the menu in 1957 as part of the Brazier idea at Dairy Queen.
In 1985, blizzard treats were introduced, and they were so well-liked that they could sell over 175 million of them in their first year. I already mentioned that I always order the Blizzard at DQ.
In 1970, they regarded Dairy Queen as the third-largest fast-food chain in America. The brand’s reputation today extends beyond just that.
In 2020, the Thailand Franchise Honor presented them with the Best Overseas Franchise award. On Restaurant Business Online’s list of the Top 500 Chains for 2021, they are ranked number 17.
Entrepreneur Magazine placed them 16th on the Franchise 500 in 2020. From the United States to Asia and the Pacific, the Middle East and Africa, and Latin America and the Caribbean, we may find Dairy Queen all over the world.
Different Dairy Queen locations exist. Some vendors simply sell their ice cream, while others sell burgers, fries, chicken, and hot dogs. This is because some franchise owners choose not to sign up for the meal program.
Many of the older DQ establishments lacked the kitchen appliances. The swirl or curl on top of the ice cream, however, is a feature that all Dairy Queen locations share.
Employees refer to that curl as the “Q,” and it is a trademark. Employees assert it requires practice and is difficult to accomplish.
Following the submission of your franchise application, Dairy Queen will decide whether to grant you permission to open a store.
When you are selected, you can expect help from Dairy Queen with building your store and instructing management and your staff on how to run the operation.
The franchise support staff at Dairy Queen will also help you with advertising and marketing. Once everything is in place, you can expect that your Dairy Queen will be constructed in around a year.
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Many Dairy Queen locations can be found both domestically and abroad, therefore you might wonder if franchise owners also sell their already-existing Dairy Queen locations. They do.
You may find the most recent businesses that are for sale by performing a fast search on bequest. These businesses range from drive-thru-equipped full-size storefronts to mall kiosks.
Prices must be arranged with the owners of each store. For several reasons, it may be simpler to purchase an existing business with an established clientele than to develop a brand-new location.
Most significantly, the venue is fully set up with the tools, licenses, and clientele.
Currently, International Dairy Queen, Inc., a division of Berkshire Hathaway controlled by Warren Buffett, manages Dairy Queen. In 1997, Berkshire paid $585 million in cash and shares to purchase the business.
The value of the Dairy Queen corporation is unknown because it has been privately owned since 1997. Berkshire Hathaway, as of October 2021, had a net value of $623.26 billion.
The 6,000+ locations they have opened worldwide serve as evidence that Buffet has reportedly made important profits with the quick-service restaurant dairy queen franchise cost.
How Much Profit Does Dairy Queen Make?
I do not know it exactly how much Dairy Queen franchise cost produces in profit but a breakdown shows that owner-operated franchises have an average annual profit of $194,000.
Franchises that are operated remotely, however, earn $117,000 annually. These are excellent profit figures for a restaurant franchise, especially if you intend to invest in several sites.
Benefits of Owning a Dairy Queen Franchise
We are here to provide you with a list of the advantages and obstacles that businesses will face so you will know what to expect when you decide to become a franchise operator. Here are a few benefits that Dairy Queen offers.
Renowned Brand
Dairy Queen is a well-known company. You wouldn’t suddenly expand to over 6,000 outlets if the business wasn’t booming.
Given that, if you decide to create a Dairy Queen in your neighborhood, marketing won’t be a problem for you.
Many people will visit your establishment for the well-known Blizzard desserts, Orange Julius, sundaes, and ice cream sandwiches.
Dairy-Free Future
Dairy Queen keeps track of consumer trends and shifting tastes. For its health-conscious clientele, Dairy Queen last year introduced the Non-dairy Dilly Bar, a plant-based, gluten-free, and vegan ice cream bar.
This kind of news, only boosts investor confidence and optimism that Dairy Queen is considering healthier ice cream choices in the future in order to serve more customers with a variety of dietary needs.
Variety of Menus Dairy Queen Franchise Cost
There are several ways that Dairy Queen serves its soft-serve ice cream. It can combine them with your preferred cookies, candies, and chocolates to create shakes, sandwiches, and banana splits. Also included in the food program are burgers, hot dogs, and fries.
Although Dairy Queen began as an ice cream shop, its extensive menu offers enough diversity for patrons to always have something novel and interesting to try.
Issues Facing a Dairy Queen Franchise Cost
Even today, operating a Dairy Queen presents its own special set of difficulties. I listed some things you need to be aware of below.
Not Everybody Is Eligible
Even if you have the financial means, it may not be simple to be approved as a franchise operator. On their website, Dairy Queen clarifies that franchise owners must have previous restaurant management experience.
If the applicant lacks the experience, the investor may partner with someone else or hire someone who does.
Therefore, if you desire the business, you must either gain that experience or share the managerial responsibilities with a qualified partner.
No Nutritious Foods
Despite being in business for over 80 years, Dairy Queen still doesn’t offer any nutritious options. The calories in their Blizzard desserts range from 310 to 1,510.
Even salads have a caloric range of 280 to 400. There aren’t any options that are currently sugar free and fat-free.
However, introducing the vegan, non-dairy Dilly Bar last year offers us optimism that Dairy Queen will begin making healthier products in order to meet the interests of many customers. To appeal to future generations, DQ will need to keep coming up with new menu options.
Unpleasant Hot Foods
It’s no secret that Dairy Queen’s ice cream is more popular than its hot cuisine. Some people argue that their hot dogs, hamburgers, fries, and chicken aren’t tasty.
Perhaps for this reason, when franchise operators apply to Dairy Queen, some choose not to take part in the food program.
But rather than including burgers on your menu knowing they won’t taste as nice as those from other major burger companies, it could be ideal if you just gain the ice cream deal when you’re about to join up.
Even I have to confess that Dairy Queen’s burgers are only merely mediocre. I get the chicken strip basket, which comes with Texas toast, French fries, and a side of ranch dressing to dip, if I intend to eat a meal there.
The chicken strip basket is a good choice if you’re hungry even though it doesn’t compare to Raising Cane’s.
Legal Disputes from the Past
Dairy Queen franchise cost was engaged in a legal dispute with some of its franchise owners back in 2008. Franchise owners in ten states sued.
Dairy Queen is in the dispute over the latter’s demands that they spend between $275,000 and $450,000 remodeling their locations or risk losing their rights to the franchise. Franchisees would also need to boost hiring workers and spend more on operating expenses.
Although the lawsuit was dropped because both sides reached a resolution, it should provide franchise operations some insight into how ugly commercial transactions may occasionally be. The fact is that this is a meaningful matter.
Are You Fit for a Dairy Queen Franchise Costs?
If owning an ice cream business, especially a Dairy Queen, has always been your ambition and you have the resources and a love for the company, go for it! Despite shifting consumer preferences and fashion trends, the widely known brand Dairy Queen has expanded and remain relevant.
Financial Conditions and Costs
The minimum funding requirements for Dairy Queen franchises in the United States are listed below
Charges / Costs Dollar Amount
Capital Liquidity $400,000
Gross Value $750,000
Total Expenditure $1,151,155 to $1,936,655
Franchise Charge $45,500
It’s important to keep in mind that the above net worth only applies to franchises with one location. Multi-unit businesses will have higher initial costs and net worth.
Besides these costs, Dairy Queen additionally demands a 4% royalty fee and a 5%–6% marketing fee. A Dairy Queen franchise is available for 20 years.
The same conditions apply to locations in Canada, except for the investment range, which Dairy Queen specifies as $800,000 to $1.2 million or higher on their website.
Financing is not available from Dairy Queen. However, if you require third-party financing, they can direct you to one.
The best way to get more specific information about Dairy Queen’s financial requirements is to get in touch with them.
They can answer questions you have and send you an updated copy of their Franchise Disclosure Document, which contains all the information you need to know about the costs and fees involved in franchising one of their stores.
Average Annual Sales or Revenue
Dairy Queen has had consistent sales growth totaling billions of dollars. The total system revenue for 2020 was $3.978 billion.
This represents a 5.8% increase over the $3.760 billion in revenue from the prior year. However, even if you go as far back as 2017, Dairy Queen’s income has increased year over year.
Given that the company has been in operation for over 80 years, its financial success is really exceptional.
Data on the Dairy Queen Franchise
Overall Units Greater than 6,000
Organizational Name Inc. International Dairy Queen
Since franchising 1944
Industry Quick-Service Dining
Subsector Food, drink, and ice cream
What Kind of Dairy Queen Franchise is an Alternative?
Continue to hunt for a new ice cream shop to open? Consider Baskin-Robbins. With over 7,000 stores worldwide, this brand offers a huge selection of ice cream varieties.
They provide healthy alternatives including flavors with no added sugar and low-calorie ice cream and frozen yogurt.
The franchise cost for Baskin Robbins is between $12,500 and $25,000, and you must have a net worth of $250,000.
Conclusion
Making an informed choice requires careful consideration of all factors while looking for a franchise. With a focus on grilled dishes and a more family-friendly environment than many other chains, the Dairy Queen Grill and Chill franchise provide a distinctive opportunity in the fast food business.
Although the typical store’s gross sales are lower than those of some of its rivals, some potential franchisees may find it to be a more alluring alternative because of the low initial cost and franchisor help.
Before deciding, it is crucial to conduct extensive research on the franchise. Speaking with current and previous franchisees can provide you with insightful information about what it is truly like to own and run a Dairy Queen Grill and Chill franchise.
